Making Infrastructure Dollars Go the Extra Mile

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With 70 percent of the world’s population — or approximately 6.8 billion people — expected to live in cities by 2050, the demand for safe, reliable and efficient urban infrastructure is growing at a rapid pace.

All cities, of all sizes, will need to invest more in infrastructure development. Cities that already have a robust infrastructure need continuous maintenance and upgrades. Areas with limited infrastructure need the basics — not just roads and bridges, but irrigation, sewage, public housing, electricity and transportation.

It adds up to a staggering sum: An estimated $49 trillion will have to be invested in infrastructure projects worldwide between 2016 and 2030 just to keep pace with expected GDP growth rates. As city leaders look to address this massive infrastructure deficit, they will need to find ways to make city infrastructure — and infrastructure dollars — go the extra mile.

The way to do this is clear: by embracing smarter, more data-driven cities. By leveraging digital technology, cities can use data to accurately predict things like transportation usage, electricity requirements, traffic density, power demand and emissions — helping them manage infrastructure better while making more informed investment decisions.

Financing this new digital approach to infrastructure development requires even stronger collaboration between the private and public sectors, as well as in-depth knowledge of the market conditions affecting the types of financing required for each project.

Investors are often hesitant to take a risk on large-scale, complex projects, but investing in our cities and the digitalization of our infrastructure is ultimately key to private sector prosperity. Access to quality infrastructure informs where companies choose to locate. Every industry is impacted by how goods and services are delivered, whether it is health care, transportation, communication or manufacturing. The smart city must adapt to what is at the intersection of digitalization and urbanization. And in each situation, unique collaboration across the public and private sectors can advance projects that make cities more livable and competitive.

For example, Siemens helped the Louisiana Stadium and Exposition District implement infrastructure and energy savings upgrades at the Mercedes-Benz Superdome. There was no initial cost for LSED, as the project was financed through savings. In Southern California, the Carpinteria Valley Water District also found that an energy performance contract would best meet its financing needs. Following severe droughts, the community sought to implement innovative water and energy-efficient solutions.

We know how much infrastructure is needed worldwide, where it’s needed and the amount of investment needed to make the word’s cities safe, efficient and productive for current and future citizens. Now it is time to work together across the private and public sectors in order to unlock the capital needed to make smart cities a reality.